The former big boss of the Caisse de depot et placement Michael Sabia was ready to close the Otéra Capital subsidiary in 2019, when reports from our Bureau of Investigation showed that it was plagued by ethical problems.
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“If we had to close Otéra, we were prepared to do so”, launched Monday morning in Court the one who was CEO of the Caisse for a decade until January 2020.
Michael Sabia testifies in the context of the $7 million lawsuit for unfair dismissal brought against the Caisse by Alfonso Graceffa, who at the time was CEO of Otéra Capital.
Graceffa was dismissed in particular for having received an envelope of $15,000 in his office from an individual with a criminal past, and for having placed himself in a situation of conflict of interest in connection with the organization’s investments. which he led.
Photo QMI Agency, Joël Lemay
Alfonso Graceffa
It was in May 2019, after receiving the report of a $5 million investigation that he had commissioned from an external law firm following our reports, that Michael Sabia said he decided “that Otéra would remain a subsidiary of the Caisse”.
“Investigators found no evidence of money laundering and fraud,” he explained to justify his decision.
On the other hand, the Caisse dismissed four people, including Mr. Graceffa as well as Martine Gaudreault, a vice-president at Otéra who operated parallel private loan activities, and whose spouse had been linked to the mafia.
The confidence of Quebecers
Before Judge Andres Garin of the Superior Court, Michael Sabia returned to the shock wave that hit the Caisse when it discovered that some of its executives had elastic ethics.
“The Caisse de dépôt’s mandate is to manage hundreds of billions of Quebecers’ savings. […] Their confidence in the Caisse, in the way we do things, in the values we have, is fundamentally important,” said Mr. Sabia.
“The bonds of trust [avec les Québécois] are the most important asset we have at the Caisse”, even went so far as to say the one who is now Deputy Minister at the Department of Finance in Ottawa.
Code of ethics
Michael Sabia also stated that when he was CEO of the Caisse, he was not involved in discussions on the Code of Ethics of the subsidiary Otéra, which specializes in commercial real estate loans and which managed nearly $14 billion in depositors’ money.
“It was mainly up to the organization itself, especially its board of directors […] This kind of files did not go back to me”, maintained the witness.
The modernization of the Code of Ethics at Otéra, to bring it up to the standards of the 21e century, was one of the main changes in 2019 following the storm that hit the Fund.